Virginia regulators reject utility’s 100% renewable energy plan

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In a decision that keeps the door open for competitors, Virginia regulators last week rejected Appalachian Power’s bid to offer ratepayers electricity supplied 100% by renewable energy sources at an undetermined rate.

The State Corporation Commission (SCC) on Thursday denied APCo’s tariff “because the company failed to prove” it “is in the public interest and that its costs and associated rate are reasonable, just and not likely to unreasonably prejudice or disadvantage renewable energy customers.”

“The program did not commit to adding any new renewable energy resources to the grid; it simply repackaged existing renewables that are already part of APCO’s standard rate,” said Peter Anderson, Virginia Program Manager for Appalachian Voices.

Environmental and consumer advocates were concerned APCo’s program would have prevented competitors from offering a 100% renewable power option to customers in APCo’s service territory, due to a clause in Virginia law. This could have forced independent renewable power providers to shut down, leading to a net loss of renewable energy in Virginia.

Peterson added: “This decision is a victory for consumers and for renewable energy advocates. If a utility company proposes a renewable energy program that locks out competition, that program ought to be driven by new, Virginia-based renewable energy facilities and priced competitively.”

One third-party supplier of electricity – Direct Energy – is moving to offer a 100% renewable energy product to the residential market but has met with resistance at the SCC. A 2007 law prohibits retail electric competition if a monopoly utility offers its own 100% renewable product, no matter the price and where the renewable energy sources operate.

Direct Energy applauded the decision by the SCC. Ron Cerniglia, the company’s Director of Corporate & Regulatory Affairs, said families and businesses should have the opportunity to shop among many competitive offerings and not be limited to one utility’s product.

“This decision,” Cerniglia added, “will also help spur economic growth in Virginia by attracting businesses who want access to renewable energy, by creating more jobs, and via an expanded tax base from renewable energy projects like those involving wind and solar.”

Dominion Energy is also planning a 100% renewable energy offering – yet to be ruled on by the SCC – that may be different enough if, experts familiar with both cases agreed, it sources the tariff with new, in-state, renewable energy generation at a specific price approved by the SCC.

“If the commission approves a power company’s proposal for 100% renewable energy, independent competitors then are locked out of the process,” said Cale Jaffe, Director of the University of Virginia School of Law’s Environmental and Regulatory Law Clinic, which represented Appalachian Voices before the SCC.

“That’s an extraordinary power that the law grants the commission,” Jaffe added. “It’s the power to tell an existing, renewable energy business that it can no longer enter into new contracts with new customers.”

“The commission recognized the need to demand that any power company’s renewable power tariff must be just and reasonable for customers before blocking access to alternative options, Jaffe said.

Karen Torrent, Chief Counsel for private power developer Secure Futures LLC, said “it would be extremely difficult for the SCC to find that an open-ended and unstated price to be determined by Dominion in the future is fair and reasonable and in the public interest.”

Jim Pierobon is a former Chief Energy Writer at the Houston Chronicle and is the principal writer of The Energy Fix blog. He is a policy, marketing and social media strategist who has reported on, testified and consulted about solar energy, energy efficiency, smarter grids, energy cyber-security, fossil fuel price spikes and the rise and fall -- and the rise again -- of nuclear energy. He resides in Northern Virginia.